The latest “report card” benchmarking Wisconsin’s performance shows moderate progress but room for improvement.
Across 23 measures of economic and fiscal health, there are neither As nor Fs — but about as many Cs as Bs.
The Wisconsin Taxpayers Alliance report, “A State Report Card,” shows that in areas such as job and firm creation, Wisconsin is improving but continues to lag surrounding states and the nation. Now in its 84th year, WTA is a nonpartisan organization devoted to public policy research and citizen education.
Among seven major categories covered in the report, workforce readiness is the state’s strongest. Wisconsin’s high school graduation rate rose from 87 percent in 2010–11 to 88 percent in 2012–13, 6.6 percentage points higher than the national average (81.4 percent) and above all surrounding states, except Iowa (89.7 percent).
Graduating high school students here also perform well on college entrance exams. When ACT and SAT scores are combined and converted to ACT equivalents, students here scored an average of 22.4 (out of 36) in 2014, above the U.S. average (21.0) and all surrounding states, except Minnesota (23.2).
The strength of the workforce does not necessarily translate to a robust economy, however. Job and firm creation here, while improving, still trail most surrounding states and the nation.
Employment here grew 1.3 percent in 2014, more than in any year since 2000; however, that was less than the national average (1.9 percent) and below all neighboring states, except Illinois (1.2 percent). Similarly, the Badger State’s 1.2 percent increase in the number of firms in 2014 was smaller than in all surrounding states, except Michigan (-0.6 percent).
Other measures of economic strength and potential followed similar trends. The value of Wisconsin exports in 2014 was 8 percent of gross state product, up from 6.6 percent in 2005, but below the national average (9.1 percent) and all surrounding states, except Minnesota (6.8 percent). In 2014, venture capital disbursed in the state totaled $28.26 per worker, more than in each of the prior three years, but below the nation ($361.74) as well as all neighboring states but Iowa ($14.20).
Moderate economic growth here is reflected in the financial security of our residents. In 2014, annual earnings averaged $51,214 in Wisconsin, which is 10.1 percent less than the national average and below all surrounding states except Iowa. While earnings here rose 12.5 percent over the past five years, they grew 13.5 percent nationally. Per capita personal income followed a similar trend. In 1990, it was 6.2 percent below the U.S. In 2014, the gap (3.3 percent) had shrunk, but the Badger State ($44,585) remained behind all neighbors, except Michigan ($40,556).
In looking ahead, infrastructure and state fiscal health can set the state up for later economic success. Good highways, low energy costs and moderate taxes are all attractive to employers. The good news is that Wisconsin’s fiscal health is improving: The combined state–local tax burden fell for the third consecutive year from 11.3 percent of personal income in 2013 to 11.1 percent in 2014. Additionally, though Wisconsin has had a general fund deficit on its CPA-prepared financial statements every year since 1990, in 2014, it was the smallest it’s been since 2000 ($1.4 billion, 0.5 percent of gross state product).
That said, highway quality is eroding in the state. In 2013, 48.3 percent of Wisconsin highway miles were scored in one of the top two smoothness categories, lower than all surrounding states and about 10 points below the U.S. average (58.1 percent). Meanwhile, 10.5 percent of state highway miles were in one of the two lowest smoothness categories, more than double the 2009 percentage (4.1 percent). Additionally, energy costs here are sometimes above other states. In 2012, average electricity prices exceeded the U.S. ($28.98) and all neighbors, except Michigan ($32.18). The same was true for natural gas prices, although Illinois ($6.84) was also above the Badger State.
The Wisconsin Taxpayers Alliance first issued the state’s only report card after 1997 gubernatorial commission chaired by UW System President Katharine Lyall recommended that “an annual report card on the state of the Wisconsin economy be issued, tracking progress in the growth of quality jobs, education, and training.” For 18 years since, the Wisconsin Taxpayers Alliance has tracked state performance.
This year’s report card includes 23 different measures across seven broad categories, with letter grades assigned to each. Grades are based on Wisconsin’s current performance relative to its past and relative to the performance of surrounding states and the nation. To find out more about how Wisconsin measures up, a free copy of The Wisconsin Taxpayer magazine, “A State Report Card” is available by visiting www.wistax.org; emailing firstname.lastname@example.org; calling (608) 241-9789; or writing WISTAX at 401 North Lawn Ave., Madison, WI 53704-5033.